After weeks of turmoil, the Senate is scheduled to vote on the confirmation of Supreme Court nominee Brett Kavanaugh on Friday.

A number of prominent groups have been spending heavily on Facebook advertisements supporting or opposing Kavanaugh’s confirmation. Most of these ads have been specifically targeting states with senators who have yet to publicly say how they intend to vote.

Judicial Crisis Network and Demand Justice have been spending the most on ads throughout Kavanaugh’s confirmation, including the time since sexual misconduct allegations came out against the judge. Dr. Christine Blasey Ford came forward a couple of weeks ago alleging that Kavanaugh assaulted her while the two were in high school in the 1980s.

Both Ford and Kavanaugh testified last Thursday before the Senate Judiciary Committee.

A number of other prominent groups have been spending on digital ads, but at a smaller scale: NARAL Pro-Choice America, America First Policies, the American Civil Liberties Union, Planned Parenthood and 45Committee.

Most notable, however, may be the thousands of other digital ads opposing or supporting Kavanaugh on Facebook pages that are not household names. Facebook only requires the funders of digital ads purchased on behalf of pages to be subject to a limited outside confirmation of a funder’s identity.

Disclosure of donors spending millions on the Supreme Court is unlikely to dramatically change under a new Federal Election Commission (FEC) guidance, which requires all ‘dark money’ groups that spend at least $250 in independent expenditures to report every donor who gave at least $200 in the past year. Many of these spenders never even report to the FEC.

Without FEC filings, incorporation records, tax documents or other disclosure requirements, it is almost impossible to uncover who is actually behind many of these Facebook ads and who is funding them. Even the most secretive of other politically active groups would be subject to such documents and requirements.

One ad used in both states is a video featuring Kavanaugh’s fiery testimony in response to Ford’s allegations. So far, the West Virginia version has made 100,000 to 200,000 impressions, mainly targeting older women. Since Facebook doesn’t list the exact figure spent on an ad, Judicial Crisis Network spent between $1,000 and $5,000 on this ad.

In North Dakota, the same ad has reached fewer people, 50,000 to 100,000 impressions, and has mainly targeted younger men ages 25 to 34 and older women ages 65 and up. Judicial Crisis Network spent between $500 and up to $999 on the ad buy.

Demand Justice

Demand Justice, another dark money group, has paid for more ads opposing Kavanaugh’s nomination than any prominent group.

Like Judicial Crisis Network, Demand Justice’s spending would also be considered ‘dark money’ since it does not disclose donors. Demand Justice does not, however, follow the more traditional model of incorporating as a tax-exempt nonprofit organized under section 501(c) of the Internal Revenue Code, which would require it to file annual 990 tax returns and potentially other incorporation documents.

Instead, Demand Justice operates as an unincorporated entity organized by a tax-exempt fiscal sponsor. That sponsor is a 501(c)(4) nonprofit named Sixteen Thirty Fund that provides a legal home and steers money from secret donors to more than 40 different unincorporated entities that are consequently not required to file separate tax returns.

This further obscures the spending of entities like Demand Justice that fall under the umbrella of a fiscal sponsor, allowing them to essentially operate without a paper trail.

Demand Justice’s Facebook ads have also targeted certain swing states, but the group’s focus is on Maine and Alaska, which has two moderate Republican senators: Sen. Susan Collins (R-Maine) and Sen. Lisa Murkowski (R-Ala.).

As of October 4, Demand Justice has more active ads on Facebook than Judicial Crisis Network.

The ad used in Maine and Alaska includes audio from a recent President Donald Trump rally where he claims that Ford’s account is full of holes. The president’s remarks play over an image of Ford testifying last week. The main target in Maine is younger people, both male and female.

NARAL Pro-Choice America, an abortion-rights advocacy group, is currently running one ad on Facebook targeting only women throughout the country. The ad is for a petition demanding that Kavanaugh withdraw from the nomination. This ad so far received 1,000 to 5,000 impressions and NARAL spent less than $100 on it.

NARAL previously spent thousands of dollars on now inactive ads about Kavanaugh that were directed mainly at older women in the United States.

Planned Parenthood’s political and advocacy arm, Planned Parenthood Action Fund, is targeting a variety of Facebook users in Maine urging Collins to vote against Kavanaugh. The organization is also targeting younger women throughout the country with an ad claiming Kavanaugh is a threat to Roe v Wade, a landmark Supreme Court decision legalizing abortion.

America First Policies, a nonprofit organization that has become the main ‘dark money’ group supporting Trump’s agenda, has also weighed in on the confirmation battle. Before Ford came forward, America First Policies ran ads targeting people in North Dakota and urging them to push Heitkamp to support Kavanaugh. The ad made up to one million impressions and cost between $5,000 and up to $10,000. However, the group has not recently been running Facebook ads.

The ad calling for North Dakota viewers to tell Heitkamp to vote in favor of Kavanaugh mainly targeted younger men.

Oh, and millions of dollars spent to fuel campaigns around those divisive issues.

At the helm of the money race is the Judicial Crisis Network (JCN), a non-disclosing 501(c)(4) nonprofit that has funneled millions of dollars in support of Kavanaugh’s confirmation as the next Supreme Court justice.

Anonymous donors pumping big money into Supreme Court nominations is nothing new, and this is not JCN’s first rodeo.

JCN first came on the scene in 2005 to promote President George W. Bush’s nominations to the high court as Judicial Confirmation Network before rebranding the “C” its name to stand for “crisis” and attacking President Barack Obama’s nominees.

Tax returns obtained by the Center for Responsive Politics in 2017 revealed that JCN has continued to be primarily funded by the Wellspring Committee, another nondisclosing politically active nonprofit, which is linked to Ann and Neil Corkery’s network of conservative “dark money” groups organized to influence public policy.

Leonard Leo, the Federalist Society’s executive vice president who has played a key role in Trump’s Supreme Court nominations, orchestrated finances related to the network and is also linked to BH Group, a mysterious LLC that donated $1 million to Trump’s inaugural committee.

Becoming a key ‘dark money’ conduit for conservatives to funnel millions of dollars into Supreme Court battles while keeping their identities secret, JCN has established itself the preeminent advocate of conservative contenders for the U.S. Supreme Court as well as in key state supreme court races and attorneys general elections.

Long before Kavanaugh was a blip on the radar of most Americans, Judicial Crisis Network had already begun spending to secure the path to the next Supreme Court seat, announcing a multi-million dollar ad buy on the day Kennedy announced his retirement.

Following its tried and true playbook to help marshal support for conservative nominees to the federal bench, JCN launched its first ad backing Kavanaugh by name within minutes of the announcement of his nomination — before President Trump even finished speaking.

In earlier Supreme Court battles, JCN reportedly spent $7 million to block the confirmation of Merrick Garland and $10 million to support the confirmation of Trump’s first Supreme Court nominee, Neil Gorsuch. Matching their promised spending on Gorsuch, JCN pledged to spend another $10 million on Kavanaugh.

In addition to advertising, JCN has also spent big money on lobbyists — including Jon Kyl (R-Ariz.)who terminated his lobbying agreement working to help marshall in Gorsuch’s nomination for JCN in 2017 before becoming the official White House “sherpa” guiding Kavanaugh through that same process in July before he was appointed to fill the Senate seat left open by John McCain’s death.

Supreme second thoughts

Over the past few weeks, however, JCN seems to have been forced to readapt their strategies amid an onslaught of controversies surrounding Kavanaugh’s nomination.

On September 17, JCN announced it was spending $1.5 million on a 30-second ad featuring Kavanaugh’s long-time friend, Louisa Garry, who was reported to have “initially signed a statement of support for Kavanaugh provided by his attorneys.”

After new allegations came to light in a New Yorker article by Jane Mayer and Ronan Farrow on September 23, Garry withdrew her name from the letter of support and said she does not “wish to dispute” the claims by Deborah Ramirez, who alleges Kavanaugh exposed himself and thrust his genitals in her face during a college party in a dorm room when they were both students at Yale University.

Ramirez was the second woman to come forward with allegations against Kavanaugh after California psychology professor Dr. Christine Blasey Ford, who is testifying before the Senate Judiciary Committee with claims that Kavanaugh and his friend Mark Judge pulled her into a room and tried to assault her at a house party.

The day after Garry said he no longer wishes to dispute the claims, all of JCN’s Facebook ads in the Facebook Ad Archive— including the ad featuring Garry — were deactivated.

Although the Federal Communication Commission’s political ad data may provide a more complete picture of JCN’s spending, filling in the blanks months before even scarce details of their finances are revealed in annual tax returns, there is still some lag between when TV political ads are purchased and when their FCC political ad disclosures become available — making it difficult to track whether JCN has made any efforts to stop running the ad on TV at this time.

In an MSBC interview on September 26, JCN’s chief counsel and policy director, Carrie Severino, would not definitively state that Judge Brett Kavanaugh should still be confirmed to the Supreme Court. She went on to tell MSNBC’s Craig Melvin, “I think we have to look into this further”—raising questions about whether JCN would continue to support Kavanaugh.

Many interpreted this to mean that Severino supported further examination of the allegations of misconduct against Kavanaugh. However, Severino later clarified that they “still fully support Judge Kavanaugh and look forward to his confirmation.”

Not true. The further examination I referred to is the SJC asking Avenatti to submit any corroborating evidence they have, something they asked for days ago and he has yet to do. Our ads are still up and we still fully support Judge Kavanaugh and look forward to his confirmation. https://t.co/8zWPwtLcgD

Within hours of this, JCN had reactivated a Facebook ad defending Kavanaugh against the allegations that first started running September 22 but was deactivated on September 24 then reactivated Wednesday afternoon in the aftermath of Severino’s interview. JCN has spent at least $5,000 and up to $10,000 on this ad, with an audience of more than 200,000 and up to half a million users.

A second ad, also defending Kavanaugh against the allegations, began running hours later. Costing less than $1,000 to date, JCN’s new ad gained more than 10,000 and up to 50,000 impressions from Facebook users overnight.

The two ads that are currently active have reached an audience composed of twice as many men than woman for all age ranges from under 54. Users age 55 and above who viewed the ad are more evenly distributed between genders, reaching slightly more women than men as of September 25.

Noticeably absent from the ads that have been reactivated is a 30-second spot featuring Louisa Garry, a friend of Kavanaugh’s for three decades. “I believe that we need to have bright, curious, open-minded, thoughtful, empathetic people who are judges, and I trust that Brett is that person,” she says in the ad.

The Twitter Ads Transparency Center provides significantly less information than Facebook and Google but their page listing JCN’s ads during the past two weeks show at least one tweet including a video highlighting Kavanaugh’s “unblemished reputation” has been promoted following the interview.

In the first week after Kavanaugh’s nomination was announced, JCN spent more than $24,200 and up to $88,293 on Facebook ads that reached more than 2.5 million and up to 5.7 million viewers.

As of September 17, JCN reported spending at least $6 million on ads supporting Kavanaugh.

Many questions remain about JCN — the identity of the group’s donors chief among them — but Servino leading an “I Stand With Brett” rally on Capitol Hill to coincide with Ford’s testimony along with the CEO of Concerned Women for America and the president of the Susan B. Anthony List has sent a clear message that JCN is fully supporting Kavanaugh for the time being.

]]>Ad wars escalate ahead of 2018 midterm electionshttps://www.opensecrets.org/news/2018/09/ads-war-escalates/
Wed, 26 Sep 2018 14:47:31 +0000https://www.opensecrets.org/news/?p=27606Outside groups are airing a larger volume of ads in federal races for U.S. House and U.S. Senate races in the 2018 cycle compared to the same dates in 2014.

Over 2.2 million spots have aired in congressional and gubernatorial races, totaling nearly $1 billion at this point in the 2018 election cycle—a 70 percent increase from the same period in 2014 midterm elections, according to a new report by the Wesleyan Media Project in partnership with the Center for Responsive Politics.

For outside groups, the jump was even more precipitous with congressional and gubernatorial TV ad airings up 85 percent from the comparable period in the 2014 midterm cycle.

Outside groups are airing a larger volume of ads in federal races for U.S. House and U.S. Senate races this cycle compared to the same dates in 2014 and the portion of advertising made up by outside groups has also grown.

Democrats dominate spending in House races while Republicans are winning the money race in the Senate and gubernatorial elections.

Florida’s Senate race—which has been the most expensive election this year and is projected to potentially become one of the most expensive Senate campaigns in U.S. history—has seen the most ads of any Senate race during the two weeks following Labor Day. Republicans continue to outspend Democrats with more than twice the number of ads aired in support of Governor Rick Scott than incumbent Democrat Bill Nelson (D-Fl).

In all but one of the other top 10 Senate races, Democrats held an ad advantage measured through advertising volume with Texas as the sole outlier.

The data in the report generally supports the conventional wisdom that the most competitive races have seen the most ad spending by outside groups, with outside groups accounting for one out of every five ads in the most competitive Senate races. Outside group sponsored advertising makes up more than half of the ads in Missouri and West Virginia, while more than one in every three ads in Indiana, Arizona, Nevada, and North Dakota have been paid for by outside groups.

On the House side, thirteen races have seen at least 2,000 ad airings in the last two weeks alone. Of those thirteen races, nine have featured significant outside group spending. The race for Colorado’s 6th District has seen nearly 64 percent of the ads from outside groups.

As with the Senate, Democrats vying for House seats have aired more ads than Republican candidates—dominating ad spending by Republican candidates in 21 of the top 25 races analyzed in the report.

The most active outside spending group in the last two weeks has been Majority Forward—a non-disclosing 501(c)(4) nonprofit required to keep politicking to less than half its activities and is linked to Democratic leadership in the Senate—which has run more than 13,410 spots in six Senate races at an estimated cost of more than $3 million in the last two weeks alone.

Almost all of the spending by outside groups backing Democrats in Senate races since Labor Day has come from “dark money” sources like Majority Forward, with groups that do not disclose their donors accounting for 92 percent of spending backing Democrats running for Senate seats.

In contrast, around three-quarters of ads backing Democrats in House races have come from disclosing groups.

Advertising supporting Republican candidates in Senate races has stemmed primarily from disclosing groups like the Senate Leadership Fund while almost half of all spending backing Republican in House races has come from one group, Congressional Leadership Fund (CLF). As a super PAC, CLF is required to disclose donors but has received substantial funding from “dark money” sources. This has included millions in contributions from American Action Network, a politically active 501(c)(4) nonprofit focused on center-right policies that share an executive director with the CLF and doesn’t have to disclose its donors.

Of the nearly 280,000 U.S. House or Senate TV ads that have aired since Labor Day, around half—48 percent—were from groups that do not disclose their donors.

That may soon change after a recent lawsuit that created a path for stronger disclosure requirements that apply to “dark money” groups. New requirements could require all “dark money” groups that spend at least $250 in independent expenditures to report every donor who gave at least $200 in the past year as well as those who give with the reported purpose of financing independent expenditures general, but the full impact is yet to be seen.

]]>Holiday reading list: OpenSecrets Blog’s best of 2016https://www.opensecrets.org/news/2016/12/opensecretsblog-best-of-2016/
https://www.opensecrets.org/news/2016/12/opensecretsblog-best-of-2016/#respondThu, 22 Dec 2016 21:52:30 +0000https://www.opensecrets.org/news/?p=18022Boy, has 2016 been a whirlwind adventure. If you’re like us, you have tabs and tabs of unread stories that…

Boy, has 2016 been a whirlwind adventure. If you’re like us, you have tabs and tabs of unread stories that caught your eye during the workday, but haven’t had time to dive into yet. Now that the holiday break is upon us, we’ll finally have the time to sink into that comfy chair by the fireplace and immerse ourselves in great journalism.

For those of you who haven’t had time to read every word OpenSecrets Blog has published this past year, have no fear! As our holiday gift to you, we’ve compiled our best investigations below in a handy listicle. Enjoy!

In partnership with the Boston Globe’s Spotlight team, we uncovered what may be the largest straw donor scheme ever reported. A small law firm in Boston reimbursed its lawyers with bonus payments for the contributions they made to federal, state and local politicians — more than $1.4 million that we were able to document. Reimbursing individuals for their political donations is generally illegal, since it obscures the true source of the funds. CRP’s investigation spurred at least 20 politicians so far to send almost $600,000 in donations from the firm’s employees to the U.S. Treasury or charity. Federal prosecutors have opened a grand jury investigation.

We attempted to make sense of 2016, the most expensive election on record — with the lower spender winning the White House. Although Hillary Clinton and her allies spent double what team Trump did (though Trump received vast amounts of free media exposure), Clinton’s inordinately high dependence on large donors may have been a sign that she wasn’t connecting with key segments of the electorate. But Trump’s (relatively) low-cost win was an exception to the overall rule: Congressional candidates with the most cash on their side prevailed at a higher rate than in recent past elections. We forecast the federal elections would cost a record-breaking nearly $7 billion.

We followed corporate and lobbyist money to the nominating conventions in Cleveland and Philly (even though the Republicans wouldn’t give us credentials to theirs), pulling back the curtain on the special interest subtext to the schmoozing. While we were there, our designated survivor back home mined DNC documents released by Wikileaks to find that party officials asked the White House to reward some donors with appointments to boards and commissions. As we now know, those documents resulted from what U.S. intelligence officials believe was a Russian government hack of the DNC to help Trump win the election.

And speaking of Russians and Trump, we found a Russian-born oil magnate who made his first-ever political donation…to the real estate tycoon-turned-candidate.Simon Grigorievich Kukes, the former chief executive of a now-defunct Russian oil company once owned by the government, contributed more than $150,000 to Trump’s campaign and joint fundraising committee, Trump Victory.

Still, some of the biggest megadonors around come from the hedge fund industry. We examined some of their firms and showed that the value of their 151 hedge funds is as high as $390 billion, with a majority of these dollars are based overseas, primarily in the Cayman Islands.

Our latest analysis of the correlation between votes and contributions focused on climate change. Turns out that lawmakers who voted for an amendment stating that human activities contribute significantly to climate change received less than one-fifth as much in campaign contributions from the oil & gas and coal industries as those who voted against it.

Sen. John Cornyn (R-Texas) has received the most money from the oil and gas and coal mining industries, over $1.6 million since 2010. (AP Photo/J. Scott Applewhite)

We also continued our unmatched coverage of dark money throughout the year with exclusive, newsbreaking pieces and explainers. We called out Democrats for employing dark money groups despite condemning Republicans for the very same practice: Using our new FCC tracker, our reporters uncovered the advertising campaign of a group that does not have to disclose its donors or necessarily report political spending to the FEC. And we found a group that actuallyadmitted to the IRS that it had spent too much on political activity.

Earlier this year, we found that more than half of ads run in Senate races weren’t reported to the FEC, with nondisclosing political nonprofits such as the Chamber of Commerce, the League of Conservation Voters and Americans for Prosperity tweaking the language just slightly to make them so-called “issue ads.”

We even tried detailing some dark money tricks using a lighter touch. Skeptical of dark money humor? It’s amusing, we promise (still, can’t hurt to have a cup of eggnog when you take this on).

Crossroads GPS, the dark money brainchild of GOP strategist Karl Rove, has received official approval of its nonprofit status. (AP Photo/Rich Pedroncelli, File)

One of our biggest dark dollar moments came when we broke the story that the IRS granted nonprofit status to Karl Rove’s group after five years in limbo. Read about how it happened. (Our story caused the New York Times to lash out with an editorial titled “Karl Rove Bamboozles the I.R.S.”) The shadowy giant Crossroads GPS reported $114 million in political spending in its first four years, and dodged reporting millions more. Conversely, GPS’s new incarnation, One Nation, went from reporting no revenue to bringing in more than $10 million in 2015.

Once Donald Trump was elected and began naming his Cabinet picks, we dug around to see what these men and women have been doing with their money when it comes to politics.For example, our potential new Education secretary, Betsy DeVos, and her relatives have given at least $20.2 million to Republican political groups and candidates since 1989. We broke down the most interesting donations and foundations for you, but also published our data so you can play with it as well.

The funding histories of nominees who have been on the receiving end of the cash chase — current or former elected officials like Ryan Zinke, Rick Perry and Tom Price — are equally worth examining, we showed.

Rep. Joseph Kennedy III, (D-Mass.) holds the largest stake of any member of Congress in Gilead Sciences, which makes the costly hepatitis C drug Sovaldi. (AP Photo/J. Scott Applewhite)

We continued delving into the personal finances of our lawmakers, showing that 24 members of Congress held stock in Gilead Sciences, the manufacturer of lifesaving hepatitis C drug Sovaldi. Gilead came under fire for its sky-high prices for patients, many of whom are victims of the epidemic of opiod abuse. Glad someone benefited from the price hike.

Along with all this great journalism, the Center for Responsive Politics created some new tools to help other reporters and the public dive deep themselves. One helps track ad buys more easily. While the FCC’s website has data on these, it isn’t standardized, isn’t searchable in any useful way and contains gaping holes. Our tool allows you to search by group, candidate, zip code or station, with links to the original purchase contracts for the air time.

We also created a new site and tool to help bring transparency to groups that don’t disclose their donors, with data visualizations to explain the complexities of how money travels so the source can remain hidden. We also now provide downloadable financial information for more than 20,000 nonprofits, thanks to a partnership with Guidestar. You can now unravel normally obscured connections by, for instance, comparing vendors and board members across groups to find the links.

Finally, we have taken over two projects from the Sunlight Foundation: Political Party Time, to help track candidates’ fundraising events, and one that tracks lobbyists for foreign interests trying to influence our government. The former is now accepting uploads of invitations — please contribute to this crowdsourcing effort! The latter is coming soon. Thanks to Sunlight for building these and keeping them going for so long.

Next year, we’ll have a new administration that is already proving to be rife with potential conflicts of interest. We hope our reporting inspires you, and our new resources help you hold our government officials accountable. Happy holidays from OpenSecrets!

In an election cycle that saw an influx of single-candidate dark money groups, most have chosen to spend on opposition research and polling, so far, rather than joining the scrum with millions of dollars of supportive advertisements. But CSP spent millions on ads and mailers that were never reported to the FEC, using funds from donors whose identities will remain hidden.

For all that was made of the two Florida heavyweights — Jeb Bush and his protégé Marco Rubio — becoming political enemies, they always had one thing in common: The consultants and lawyers around them profited handsomely from their political aspirations. While Team Rubio doesn’t have its Mike Murphy, it does have at least half a dozen consultants who won big even though Rubio lost, and that’s illustrated in CSP’s first filing.

Nearly 89 percent of CSP’s spending went out the door as payments to firms linked to the people running it or to firms with strong ties to Rubio’s campaign. All of them were paid either by Rubio’s own campaign and leadership PAC or by the super PAC that was set up to support him — which, itself, was run by the same people, at the same address.

First, CSP had to raise money, and much of that was done through fundraising consultants close to Rubio. CSP raised more than $3.7 million through paid fundraisers over the course of the period covered by the tax documents. The majority of that, $3.6 million, was brought in by a firm called Anna Rogers, Inc. — a company founded and named after the former American Crossroads staffer who had become the Rubio campaign’s national finance director in January of 2015, according to the Washington Post.

Rogers retained $95,000 for her work with CSP, but as early as February 2015, she also began receiving payments from Rubio’s affiliated PACs. The first was the Rubio Victory Committee — a joint fundraising committee that collected money for Rubio’s campaign and his leadership PAC, Reclaim America PAC. The latter also paid her directly for “fundraising consulting.” Then, a few weeks before Rubio declared his candidacy, Rogers began receiving $12,000 a month from Rubio’s presidential campaign, which was later reduced to $9,500 per month. In all, Rogers was paid nearly $140,000 through March 2016 by PACs in Rubio’s orbit — in addition to her known payments from CSP.

Two other fundraisers raised $50,000 each for CSP, and both were also connected to Rubio’s campaign. The first was Andrea Byars, whose husband, Luke, is a former head of the SC Republican Party and current managing partner at First Tuesday Strategies. She and her husband’s firm received payments of over $75,000 from the Rubio Victory Committee and the campaign itself, starting as early as January 2015. First Tuesday Strategies was also paid nearly $124,000 by Conservative Solutions PAC — the main super PAC supporting Rubio, which was run by Byars’ First Tuesday partner J Warren Tompkins, who also ran the (c)(4). Rubio’s campaign manager, Terry Sullivan, co-founded the First Tuesday with Tompkins in 2006.

Tompkins himself benefited from $137,500 in “management” fees through J Warren Tompkins, Inc. The same firm was paid an additional $170,696 through the CSP super PAC. Parlay Political, a consulting firm linked to another CSP director, Joel McElhannon, was paid $84,500 for “management and research.”

By far the largest single recipient of CSP cash, however, was a firm called 0ptimus Consulting LLC. More than two-thirds of the (c)(4)’s expenditures, $1.4 million, went to commission a 270-page political research document from the firm on early-state primary voters, which was published on CSP’s website so anyone — including Rubio’s campaign — could access it for free.

0ptimus Consulting has been a part of Rubio’s political team since 2013; Rubio’s leadership PAC, Reclaim America PAC, paid the company $200,000 in 2013 and 2014. So far in 2016, nearly 93 percent of the payments reported to 0ptimus in FEC data, totaling $1.2 million, have been from either the Rubio campaign or Reclaim America PAC — making it all the more interesting that the only (c)(4) to have ever contracted with the firm, according to all available data, is one so closely tied to Rubio allies. Bloomberg even described the company as “the Washington consulting firm to which Rubio has outsourced his data operation.”

While that raises the possibility of illegal coordination between the two, it’s not uncommon for firms to assert that they have set up a firewall system to prevent communication between those working for the different organizations — a strategy that has passed muster with regulators. Still, the arrangements raise questions about whether the (c)(4) truly was a social welfare organization set up to benefit the broader public — a requirement of its tax status — or a political entity set up to avoid FEC disclosure and ultimately help just one person: Marco Rubio.

Evidence of the latter is hard to avoid. The (c)(4) and the super PAC shared staff, a building, and vendors, and most of those vendors also were being paid by the campaign itself. Though the super PAC is a political committee and CSP holds itself out as a 501(c)(4) organization that’s not supposed to be primarily political, the nonprofit bankrolled a raft of polling and research on voters in early primary states and spent millions on pro-Rubio TV ads that aired in those states.

About a week after its broadcast ads stopped, the super PAC arm picked up where the nonprofit left off using the same media buyer, Target Enterprises.

Overall, CSP was the second biggest advertiser running televised political ads last year, spending over $8 million on nearly 5,000 ads supporting Rubio. That’s over 12 percent of all dark money ads — including those benefiting Senate and House candidates — that aired in the current election cycle through May 8, 2016.

The fact that CSP apparently existed for virtually no other purpose than to promote Rubio’s candidacy, which would subvert the group’s claim to “social welfare” status, has drawn the attention of campaign finance watchdog groups. In November 2015, two watchdog groups filed complaints with the Tax Division of the Justice Department and a third filed a complaint with the IRS. As evidence, the complaints note that documents filled out when air time was purchased for CSP ads, such as the FCC filing below, explicitly state the ads were meant for “supporting Marco Rubio.” Still, officials at CSP remained adamant that the organization was not supporting Rubio’s presidential candidacy.

CSP has yet to report any political spending whatsoever to the Federal Election Commission and has faced no public enforcement actions.

Ultimately, the push for Rubio proved unsuccessful against the $2 billion and counting in free ‘earned media’ Donald Trump has garnered in the race for the White House. CSP nonetheless made a notable impact on the electoral landscape and redefined the boundaries of dark money groups’ involvement in presidential elections.

Don’t hold your breath

The fact that CSP didn’t announce its first seven-figure ad buy of pro-Rubio ads until June of last year is important because the group had just filed its first 990; the document covered only the group’s first few months, during which it spent just $63 dollars. This was not because the social welfare organization was required to file with the IRS after such a short period of time in existence. Rather, the aim was to arrange CSP’s fiscal year so it could file subsequent returns in the very distant future.

The group’s new fiscal year would go from June to May, meaning a seven-figure ad buy in June 2015 would be reported to the IRS in CSP’s filing covering the 12 months from June 2015 to May 2016. That return will likely not be filed until April of 2017. And that’s why all of the CSP numbers reported here, aside from ad buy data, cover only the group’s first 16 months in operation, up to May of 2015.

Gaming the substantial, nearly 11-month time lag the IRS allows between the end of a social welfare group’s fiscal year and its tax filing deadline has become par for the course for politically active”dark money” nonprofits. As a result, the nonprofit can postpone disclosing what it raised and spent, and how, in the most active portions of this cycle’s Republican primary campaigns until months after the next president is sworn in and long after voters have moved on to the next shiny thing. Even then, the identity of the $13.5 million donor and all the other benefactors of the group will nevertheless remain a mystery.

]]>https://www.opensecrets.org/news/2016/05/new-tax-forms-rubio-dark-money-legacy-even-darker/feed/0Nonprofit cops to too much politicking, sends IRS an IOUhttps://www.opensecrets.org/news/2016/01/nonprofit-cops-to-too-much-politicking-sends-irs-an-iou/
https://www.opensecrets.org/news/2016/01/nonprofit-cops-to-too-much-politicking-sends-irs-an-iou/#respondThu, 21 Jan 2016 16:50:48 +0000http://www.opensecrets.org/news/?p=12567In the world of campaign finance, this is becoming a familiar story: A nonprofit group is launched by individuals with…

In the world of campaign finance, this is becoming a familiar story: A nonprofit group is launched by individuals with political connections; has no physical office, volunteers or employees; and spends much of its money on political consultants, some of whom are linked to the operatives running the group.

Also, it does little or no spending on what might be called social welfare — a requirement of the nonprofit 501(c)(4) tax status it claims. IRS rules require (c)(4) groups, which don’t have to disclose the names of their donors, to keep political work to under 50 percent of their activity.

Oklahomans for a Conservative Future, though, stands apart from most other dark money groups in a couple of ways. The first: its dedication to backing just one candidate, former Oklahoma House Speaker T.W. Shannon, a Republican who made an ultimately failed 2014 bid for a U.S. Senate seat.

OCF told the IRS that it had spent $1.4 million boosting Shannon, but totals reported elsewhere in the group’s annual tax filings show that the sum is likely much higher, possibly even the entirety of the group’s $2.1 million in outlays. At a minimum, OCF’s political support came close to matching the $1.9 million that Shannon’s own campaign spent leading up to his primary.

The other twist? OCF owned up to spending too large a share of its resources on politics — and promised to do better next time around. In effect, it gave the IRS a dark money IOU.

All indications, though, are that the group will be reneging on that commitment.

Sooner showdown

Candidate-specific super PACs have been around since at least 2012, but dark money groups supporting a single candidate — like the pro-Marco Rubio (R-Fla.) Conservative Solutions Project, which has pumped more than $8 million into ads supporting his White House bid — came into their own in the 2014 midterms. OCF was one of three that existed that cycle, with a combined revenue of $26 million. Only one such group existed in each of the two previous election cycles, with a combined revenue of just $2.9 million. One of the groups, a liberal 501(c)(4) supporting Sen. Blanche Lincoln’s (D-Ark.) failed bid for re-election was denied exempt status by the IRS for its political activity.

Three of Shannon’s closest political allies — Chad Alexander, Xavier Neira, and Stephanie Milligan — incorporated the group mere days after Shannon announced his candidacy and just months before the state’s Republican primary.

Alexander was a partner at two political consulting firms, A.H. Strategies and its sister company, Majority Designs; both contracted to run components of the Shannon campaign itself. He had another firm as well, Alexander Companies.

Neira was a vice president of a major building company, Manhattan Construction, and a member of Shannon’s exploratory steering committee for the Senate race. He was helping Shannon bring in cash for his run, too, signing on as one of the “hosts and sponsors” of a March 2014 fundraiser in Oklahoma City. Neira was also chairman of a second, state-level committee that paid most of the money it raised to Alexander’s firms. Alexander Companies received $33,000 from the group in rent and for contract services while Alexander was also running OCF, the pro-Shannon (c)(4), and was a partner at firms under contract to Shannon’s campaign.

Overlapping personnel doesn’t necessarily compromise the independence of outside spending groups like OCF, in the eyes of the law. Still, the picture became even more complex when Alexander, who was also a former lobbyist and onetime chair of the Oklahoma Republican Party, was arrested in May 2014 for possession of cocaine and prescription drugs (he later pleaded guilty). The affidavit attached to the search warrant for his cell phones suggests that officials at OCF and A.H. Strategies may have been coordinating with Shannon’s campaign. According to the document, interviews conducted by the district attorney’s office indicated that Alexander operated OCF “at the same time he is or was actively involved with the campaigns of individual candidates being represented by…A.H. Strategies” and its founder and leader, Fount Holland.

Alexander was a consultant at A.H. Strategies for months after the firm began helping run Shannon’s campaign. But Holland told Oklahoma Watch at the time that “there was absolutely and unequivocally no coordination” between OCF and the campaign, which would be prohibited by federal election law.

The affidavit also implicates Neira, saying that some of the witnesses interviewed claimed he and other A.H. Strategies operatives “demanded they donate to both [OCF] and to the candidates being promoted by A.H. Strategies.” Neither Oklahoma nor Department of Justice officials contacted by OpenSecrets Blog would say whether there was an ongoing investigation of either coordination or coerced contributions, and Neira didn’t respond to multiple calls seeking comment.

Oklahoma state Rep. T.W. Shannon, left, faced off against Rep. James Lankford, right, in the GOP primary for an open U.S. Senate seat in June 2014. (AP Photo/Sue Ogrocki)

Shannon isn’t mentioned by name in the affidavit, but he is the only candidate OCF ever supported, and his campaign paid A.H. Strategies and Majority Designs more than $87,000, according to FEC data.

By the time the primary rolled around, OCF had reported to the FEC spending nearly $1.3 million on communications blasting Shannon’s opponent, two-term Rep. James Lankford, and supporting Shannon. Retiring Sen. Tom Coburn (R), whose seat the two GOP candidates were trying to win, bashed the ads, saying they “simply aren’t truthful.”

Ultimately, OCF’s involvement may have hurt Shannon more than it helped him. On June 24, 2014, Lankford bested him with 57 percent of the vote — helped in part by a dark money group of his own, the Foundation for Economic Prosperity. He credited his win, in part, to the negativity of OCF and other pro-Shannon efforts.

Oklahomans for a consultant’s paycheck

Neira said that OCF’s “supporters come from different business interests and industries.” Those supporters, however, were not many.

As for outflow, OCF tax documents show that nearly $1.6 million, more than 73 percent of its overall spending in 2014, was paid to two political media firms, Media Ad Ventures and Majority Strategies; FEC data indicates these were the main firms contracted to produce OCF’s pro-Shannon ads. FEC filings also show at least an additional $83,136 was paid to five firms for things like pro-Shannon web ads and pro-Shannon polling.

None of OCF’s three board members drew a salary there. That’s not to say they didn’t get paid, though. Alexander Companies received $88,000 for “strategic consulting services, while the Kozlow Group — a consulting firm run by Evan Kozlow, who became OCF’s secretary after the original board left — was paid $45,000 for similar work.

Taken together, the known payments to media firms and to companies connected to the group’s board members — as well as $55,812 paid to a fundraising company — make up at least 86 percent of the $2.1 million the group spent in its first year. That number creeps close to 100 percent when coupled with the $250,359 in expenditures it characterized as “legal” and “other.”

Hard to find much social welfare there.

OCF knew the totals would raise eyebrows, so it did something novel. It included what amounts to an IOU to the IRS — a note affirming that it spent enough on “social welfare” in the following fiscal year, 2015 (for which no return is yet available) to balance out the group’s political spending in 2014.

A look at OCF’s activities since Shannon’s loss, though, casts some doubt on that statement.

Educating the public by hiding from it

Following Alexander’s departure, along with that of the rest of the original board, two former staffers to Rep. Tom Cole (R-Okla.) — himself a former political consultant with deep ties to Alexander — took over OCF, along with Kozlow.

Heartland Principles’ website was registered anonymously in July 2015 and is located in what’s known as the “deep web” — a part of the online world that is hidden from the “surface web” and conventional search engines. Only individuals with prior knowledge of the group’s, and the site’s, existence can access it easily.

What’s worthy of such secrecy? An assortment of short white papers on broad issues like energy and the economy, a policy questionnaire and a polished one-minute video full of platitudes like “The heartland has always taken care of its own.” There’s no mention of who runs the organization, and the group’s only social media presence is a Facebook page with four posts dated Nov. 6, 2015, containing only the group’s logo and a cover photo.

It’s unlikely that maintaining the site or its social media accounts for much to the $1 million Heartland Principles claims to have spent in 2015, which brings us to another twist in the OCF saga: its ad buys on behalf of a small trade association representing the interests of “domestic onshore oil and natural gas exploration and production.”

FCC filings indicate that Heartland Principles has been airing an ad that appears to have been created and produced by the Domestic Energy Producers Alliance as a part of an “education campaign” to get Congress to scrap the longstanding ban on exports of U.S. crude oil. DEPA was running an identical ad starting in August 2015, with airtime purchased by the same media buyer.

The two groups never aired the ad in the same state.

Unlike DEPA, though, Heartland Principles makes no mention of the issue on its clandestine website, except deep within one of its white papers.

At least one television station believed DEPA to be the true funder of the”Lift the Ban” ad that was supposedly being run by Heartland Principles, inserting the names of board members of DEPA under those of Heartland’s principles.

The web address listed in the ad, LiftTheExportBan.com, redirect to DEPA’s website, which makes no mention of Heartland Principles. In fact, the only mention of the shared sponsorship between the groups exists in slide 41of a DEPA PowerPoint presentation from August.Any mention of Heartland Principles disappeared from the same slide by December.

So, did a nonprofit formed by Oklahoma political operatives help carry the water of a trade association of independent oil producers — and if so, why?

The answer may be found in a former professional football player and member of Congress. As it happens, Chad Alexander was a longtime aide to former Rep. Julius Caesar “J.C.” Watts, Jr. (R-Okla.) — who is the longtime lobbyist for the DEPA. The two have remained close; when Alexander was given a radio show last year, Watts appeared as a guest twice in the firstmonth.

“I don’t recall making the connection” between OCF/Heartland Principles and DEPA, he told OpenSecrets Blog in an email. But there’s little question that Heartland helped share the cost of airing the ad nationwide and keeping the pressure on federal lawmakers to end the export prohibition.

In a major coup for US oil producers, the ban was lifted as a part of the omnibus package passed by Congress last December.

Overhead overcounted?

One remaining question is whether Heartland Principles’ airings of DEPA’s ads last year will add up to enough social welfare to make up for its political activity on behalf of Shannon in 2014.

Experts think it’s unlikely.

For one thing, in its IOU to the IRS, Heartland Principles counted only the direct costs of its pro-Shannon advocacy as political spending. That implies that everything else — payments to fundraisers, lawyers, and companies linked to its board — amounted to expenditures for social welfare purposes. But the group didn’t spearhead major social welfare programs, only vague activities like “promoting conservative principles and policies within the meaning of Internal Revenue Code 501(c)(4)” and “general consulting related to public policy advocacy and initiatives.” And there’s no concrete evidence of even that.

That won’t hold water, according to Lloyd Mayer, a specialist in tax and election law at Notre Dame University’s law school. OCF, like any other not-for-profit organization filing a 990, “has to allocate any overhead expenditures — fundraising, legal, administrative, etc. — between its political and social welfare activities,” Mayer told OpenSecrets News.

“The IOU strategy will not work either,” Mayer said. “Tax-exempt status is determined on a year-by-year basis, so if this group’s primary purpose was political in 2014 then it was not tax-exempt under 501(c)(4) in that year even if in 2015 it did qualify under 501(c)(4).”

His view is shared by Marc Owens, a Washington lawyer and former head of the IRS’ exempt organizations division, who calls Heartland’s 2014 filing a “contender for a Pulitzer in the category of ‘fictional form 990s.'” According to Owens, “the IRS would require the organization to establish, via contemporaneous evidence, the link between any particular expenditure and furthering social welfare — in other words, [the agency won’t accept] assumptions that everything not tied explicitly to the referenced Senate race is automatically a good (c)(4) expenditure.”

If the past is any guide, though, chances are slim that the IRS will take action. There’s only a seven in 1,000 chancethat anyone at the IRS will look at the report and an even smaller possibility that it will be set aside for additional scrutiny. Even if that happens, it will be years before the agency decides what, if anything, to do about OCF’s activity.

Nobody affiliated with the group responded to questions we submitted. We received only an email from OCF spokesperson Julie Shutley:

“Thank you for your interest in Heartland Principles. As a general policy, we do not release additional information on the organization’s internal operations outside of what is required by law. Please note that we take seriously our compliance obligations and have fully complied with all IRS rules and regulations.”

Heartland Principles’ next 990, which will cover the 2015 activities that it claimed would make up for its 2014 politicking, likely won’t be filed until November.

Correction, 1/27/2016: This story has been corrected to reflect the fact that one single-candidate dark money group existed in 2010 and one in 2012.

]]>https://www.opensecrets.org/news/2016/01/nonprofit-cops-to-too-much-politicking-sends-irs-an-iou/feed/0Presidential Candidates Spend Big Dollars to Be Heard on Airwaveshttps://www.opensecrets.org/news/2007/10/being-heard/
https://www.opensecrets.org/news/2007/10/being-heard/#respondMon, 22 Oct 2007 10:45:00 +0000Since the start of the cycle, Republican Mitt Romney has been the biggest spender on advertising, focusing much of his funds on maintaining his website and on broadcast ads in the earliest primary states. Romney has spent a total of $14.7 million on advertising in the last nine months.

]]>Since the start of the cycle, Republican Mitt Romney has been the biggest spender on advertising, focusing much of his funds on maintaining his website and on broadcast ads in the earliest primary states. Romney has spent a total of $14.7 million on advertising in the last nine months.

About half of that was spent during the 3rd quarter, which is nearly three times more than he spent during the first three months of the cycle. While none of the other candidates have matched Romney’s spending in any quarter, they’re now scrambling to make sure the early primary states get their message before the quickly approaching primary elections.

Among Democrats, Barack Obama has spent the most on advertising, at $5.4 million, and increased his spending 14 times from the 1st to the 3rd Quarter. Democrat Bill Richardson, however, spent 42 times more on advertising in the summer months compared to the first three months of the year, from $36,500 to $1.5 million over the summer months.

Over the next three months, the candidates will likely continue to spend even more on telling voters why they should vote for them—and why they shouldn’t vote for their opponents.